US & World Daily Markets Financial Briefing 26-04-2007

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WALL STREET OUTLOOK Higher on strong results led by Apple, 3M UPDATE

LONDON (Thomson IM) - Wall Street is set for gains as strong earnings from
Apple and 3M combined with a narrower-than-expected loss at Ford continued a run of solid quarterly results that lifted the Dow Jones Industrial Average above
the 13,000 level for the first time yesterday.

According to spread bettors IG Index, the Dow industrials are expected to
open up 16 points higher at 13,106.

"The market's being cheered on by good earnings," said Peter Cardillo, chief
market economist at Avalon Partners. "Obviously expectations for earnings and
guidance were too low."

Cardillo said the strength in quarterly results is helping minimise concerns
about rising oil prices and a weak dollar.

Yesterday, stocks surged on a raft of strong quarterly results and a
sharper-than-expected increase in orders for durable goods.
    The Dow rose 136 points, or 1.1 pct, to 13,090. The blue-chip index has
risen in 18 of the past 20 sessions and gained more than 780 points in that
time.

A trio of Fed speakers and the latest weekly jobless data will provide the
economic backdrop to another busy day on the earnings front.

The number of people filing new claims for unemployment insurance fell more
than expected, hitting a low not seen in a month, the Labor Department said.

First time claims fell 20,000 to 321,000 in the week ended April 21, lower
than the 330,000 new claims economists had expected.

Dallas Fed president Richard Fisher speaks on the economy at 5.15 BST while
Fed governor Frederic Mishkin goes before the International Monetary Fund to
talk about globalisation and financial development at 5.30 pm BST.

San Francisco Fed president Janet Yellen speaks after the market close.

Oil edged lower amid reports key producer Iran and the EU had made some
progress in talks aimed at settling a dispute centring on the Persian Gulf
country's nuclear enrichment activities.

But analysts said prices would not retreat much, as the market remains
underpinned by declines in US gasoline stocks ahead of the peak demand summer driving season.

New York light sweet crude for June delivery was last down 29 cents at 65.55
usd a barrel.

The US dollar gained against the Japanese yen amid expectations the Bank of
Japan will leave interest rates unchanged when it announces its decision
tomorrow. The greenback also made modest gains against the euro and sterling.

At last check, the dollar was up 0.6 pct at 119.29 yen. The euro fell 0.2
pct to 1.3614 usd, while sterling gave up 0.2 pct to trade at 1.9970 usd.

In company news, Apple's forecast-beating earnings are set power gains in
the technology sector.   The company's first-quarter profit grew 88 pct on strong sales of its
ubiquitous iPod digital music player and Mac computers.

Investor optimism in the trendsetting company may have also been bolstered
by a vote of confidence the board of directors gave Apple's chief executive
officer, Steve Jobs.

The board on Wednesday defended the iconic CEO from new accusations by a
former Apple executive, who alleged Jobs may have had a more significant role in
the company's backdating of stock options than previously stated.

Apple shares were up 8 pct at 102.93 usd in pre-market dealings, putting the
company on track to break the 100 usd mark in official trading.

On the Dow, 3M shares rose 4 pct to 80.05 usd in pre-market trade as the
maker of adhesive and Post-It note maker posted first-quarter results that
breezed past analyst expectation.

Exxon Mobil, another Dow member, also tacked on 0.6 pct after the oil giant
posted a better-than-expected first quarter, saying higher refining, marketing
and chemical margins were partly offset by a decrease in crude oil and natural
gas prices.

Total revenue for the quarter was 87.22 bln usd, which was lower than the
88.98 bln usd seen last year, while capital and exploration costs edged down to
4.28 bln usd from 4.82 bln usd a year ago.

Programmable chip-maker Xilinx Inc's better-than-expected results will lend
further support.

Elsewhere, shares in Ford Motor Co surged 8.1 pct to 8.52 usd in pre-market
dealings after the car maker's first-quarter loss narrowed versus a year ago.

Revenue also rose rose to 43 bln usd from 40.8 bln usd last year.

Shares in Wendy's International Inc shot up 11 pct to 38.28 usd in
pre-market trade as it used its first-quarter results to announce that it was
forming a special committee of directors to consider a possible sale of the
fast-food group, among other options.

Bristol-Myers Squibb said its first-quarter profit fell 3.4 pct on a drop in
sales of several key drugs, but its earnings still beat Wall Street
expectations. It also said interim CEO James Cornelius has been elected to the
job until the annual shareholders meeting in 2009.

Aetna shares could see early gains after the health insurer posted
forecast-beating results and raised its annual operating earnings per share
estimate.

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Euro hits new yen high as dollar rebounds ahead of claims

LONDON (Thomson Financial) - The euro struck another new all-time high
against the yen and remains close to its record against the dollar despite the
US currency's rally ahead of this afternoon's US weekly jobless claims data.
   

The European single currency recorded its new yen high of 162.53 yen on
expectations strong growth would lead to further interest rate rises for the
13-nation single currency euro zone.
   

David Jones, chief market analyst at CMC Markets, believes the yen, which
has slumped in recent months on the carry trades, may fall further tomorrow.

Currency players have driven the euro higher in recent months on growing
expectations of further interest rate rises by the European Central Bank, with
most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile,
the US Federal Reserve is widely expected to start cutting its key Fed funds
rate from the current 5.25 pct some time this year because of soft economic
data.

Today's German data further reinforced the market's view of buoyant economic
conditions in the euro zone's largest economy.

Meanwhile, this afternoon's US weekly jobless claims data will be closely
watched ahead of next week's crucial US jobs report for April.

Analysts polled by Thomson Financial expect weekly claims to have fallen to
330,000 from 339,000 in the prior week.

Elsewhere, the dollar's recovery pushed the pound way below 2 usd despite
rumours the UK's biggest bank HSBC is having to buy up to 5 bln stg in dollars
in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK's largest building society.

BNP Paribas' Stannard reckons that the market has got to the point that rate
expectations have moved so much that it is making it difficult for the pound to
make additional headway.

The market is now fully pricing in another interest rate hike from the Bank
of England next month to 5.50 pct after CPI inflation jumped to a 15-year high
of 3.1 pct in March and the UK economy continues to grow above its long-run
average.

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Top Stories in Europe at 11.05 BST

Amsterdam - ABN Amro Holding NV said it granted due diligence to the consortium of Royal Bank of Scotland, Santander and Fortis which is competing with Barclays to buy the Dutch lender. ABN Amro said its boards "have agreed to provide ... the same information that was previously shared with Barclays PLC," subject to confidentiality agreements.

Paris - Elliott Associates, a minority shareholder in motorway operator APRR, has unexpectedly backed Eiffage in its battle with Sacyr Vallehermoso, by asserting that the Spanish group should extend its takeover offer to APRR, French daily La Tribune reported without citing sources.
 
According to the paper, Elliott Associates is preparing a dossier for French market regulator, AMF, claiming Sacyr should be obliged to make a bid for APRR if it goes ahead with its all-paper offer for Eiffage.

Retailer PPR said first quarter sales were 4.447 bln eur, up 5 pct from a year earlier, amid solid growth in all divisions except Redcats. Sales on a comparable basis were up 5.6 pct.

Berlin - Deutsche Telekom AG's chief executive officer Rene Obermann sees a takeover of the company by a financial investor as possible if the company can push through plans to reduce annual costs by outsourcing its customer service division. "I do not think it is impossible that we become the subject of takeover scenarios, if we can manage to increase the company's valuation in the next few
years," Obermann said last night.

Milan - Gazprom is currently assessing which Eni SpA, and also Enel SpA, assets it wants to buy, Gazprom vice-president and head of export division Alexander Medvedev told Il Sole 24 Ore in an interview. "The agreement with Eni, but also with Enel, which won the bid for OAO Arctic Gas with Eni, allows us to choose assets on the basis of the portfolio proposed by the Italians," Medvedev said.

Frankfurt - Bayer AG unexpectedly released first-quarter earnings figures, saying net profit more than quadrupled to 2.8 bln eur from 0.6 bln thanks to one-time gains from asset sales. Net profit was boosted by a one-time gain of just under 2.2 bln eur from the divestment of the diagnostics business and HC Starck.

BASF AG said its first-quarter EBIT before exceptional items rose 13.5 pct to 2.116 bln eur, due to a strong performance in the company's chemicals division. The result beat forecasts for pre-exceptional EBIT of 1.970 bln.

London - Russian energy group Rosneft said its proved oil and gas reserves grew 6.1 pct at end-2006 following acquisitions and further exploration and development work on its key oil and gas fields. The estimates, which were checked by independent auditor DeGolyer and MacNaughton (D&M), assumed a 7.3 pct rise in oil and gas condensate reserves and 1.5 pct growth in gas reserves.

Stockholm - LM Ericsson AB reported a first-quarter profit after financials of 8.264 bln skr, up 24 pct from a year earlier and in line with market expectations of 8.2 bln skr, according to SME Direkt."The growing earnings in Sony Ericsson contributed significantly to the improved result," said Ericsson.

Lisbon - Portugal Telecom SGPS said it holds "regular discussions" with Telefonica SA over strategic alternatives for their Vivo Participacoes SA mobile phone joint venture in Brazil thought no decision on the
ownership of Vivo has been made yet.
 
In a statement, PT said: "There is no agreement with Telefonica regarding a change of control or change of ownership at Brasilcel and both companies continue to focus on enhancing the operations of Vivo."

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Asian shares close higher as Dow surpasses 13,000 points

HONG KONG - Shares across the Asia-Pacific region ended higher, with trading boosted by the Dow Jones Industrial Average closing above 13,000 points for the first time overnight.
   
Tokyo shares finished higher after investors took their their cue from Wall Street's strength, but some investors were cautious ahead of local corporate earnings reports and the release tomorrow of important economic data.
   
The Nikkei 225 Stock Average closed 193.01 points or 1.12 pct higher at 17,429.17, off a high of 17,496.11. The TOPIX index of all first-section issues rose 16.07 points or 0.95 pct to 1,703.41, slightly off the day's peak of 1,706.61.
   
Hideo Mizutani, chief strategist at Sieg Securities, said sentiment improved on the Wall Street record and Tokyo's gains had been led by the futures market, helped by rallies elsewhere in East Asia. Buying appetite was whetted by expectations that companies will report healthy earnings, Mizutani added.
   
Australian shares closed higher with investors buoyed by the gains on Wall Street and with strong interest in miners, which rose on higher metal prices.
   
Investor sentiment continued to be supported by Tuesday's benign inflation data for the March quarter which showed the Reserve Bank of Australia is unlikely to raise interest rates in 2007.
   
The S&P/ASX 200 ended up 24.0 points or 0.39 pct at 6,212.2, closing the gap to the record close of 6,236.9 set on April 18. The benchmark index closed off a high of 6,227.3 and a low of 6,195.5.
   
Hong Kong shares were higher in afternoon trade on the Dow Jones record and a strong performance by stock markets in mainland China. At 3.20 pm the Hang Seng Index was up 191.35 points or 0.83 pct at 20,728.13.
   
In mainland China, A-shares in Shanghai and Shenzhen closed higher on continued fund inflows due to the strong yuan, with property and tourism stocks gaining ground.
   
The Shanghai A-share Index was up 40.73 points or 1.04 pct at 3,975.68 and the Shenzhen A-share Index was up 14.99 points or 1.37 pct at 1,108.03, a new closing record.
   
Seoul shares recouped yesterday's modest losses to close higher, with sentiment lifted by the Dow Jones Industrial Average surpassing 13,000 points and several upbeat quarterly results from local companies.
   
IT stocks and banks rebounded sharply on rotational interest by foreign investors to replace ship builders and machinery stocks. The KOSPI index closed up 7.58 points or 0.49 pct at 1,553.13, after hitting a new record intra-day high of 1,565.03. The day's low was 1,553.99.

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Metals - Gold turns lower as dollar stages modest rally against euro

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